Boeing notified supply chain: prepare for 52 737s per month

Boeing has notified is supply chain that demand for the 737 is sufficient to support a rate increase to 52 a month by the end of the decade.

In a letter dated January 3, Kent Fisher, vice president of supplier management, set the date for going to 47/mo in July 2017. The year had previously been announced by Boeing. Fisher continued that demand is “sufficient” to take the “protection rate” to 52/mo “later in the decade.”

Production Rates to 2020

“Protection rate” means the Boeing and the suppliers need to protect the ability to increase to the desired rate in terms of tooling, machinery, parts, and their own suppliers. This notification isn’t as firm as announcing an actual production rate increase, but it’s pretty close.

Airbus, meanwhile, continues with construction of its Mobile (AL) plant, with a target operational date of next year. Initial production will be 2/mo, ramping up to 4/mo. The plant has the capacity of 8/mo. This means Airbus increases production of the A320 family to 44 in late 2015 or early 2016, then 46 later in 2016 and 48 to 50 thereafter.

The Airbus and Boeing production rates dwarf those of Bombardier, which is challenging the Big Two OEMs at the lower end of the 100-220 seat sector with the 110-145 seat CSeries, and Embraer, which produces the 100-122 seat E-190/195 E1 today and which is offering the 132 seat E-195 E2 for delivery beginning in 2018.

Airbus’ factories are in Hamburg, Toulouse, Tianjin and from next year, Mobile. Hamburg and Toulouse are currently producing 38 A320 family members a month, weighted toward the latter, and Tianjin is at 4/mo. Tianjin and Mobile have the capacity of 8/mo each; we don’t know the total capacity of the Hamburg and Toulouse plants but are told these are at capacity; Airbus declined comment. This means Airbus has the capacity to go to 54 A320s/mo among the four plants after Mobile is fully operational.

Boeing has the capacity for 63 737s a month at its single Renton (WA) factory. Embraer has the capacity for 17 E-Jets a month. Bombardier plans a capacity of 20/mo for the CSeries.

12 Comments on “Boeing notified supply chain: prepare for 52 737s per month

  1. That gives a total production output of 154 NBs per month (total of all 4 OEMs by 2020). Can the worldwide customers absorb that many for an extended period of time (at least 2 years, maybe longer)? That is a rate of 1,848 airplanes per year.

  2. I suppose challenge will more be in securing extrernal capabilities (do subcontractors ready for such rates?) than in increasing internal FAL rates. TLS and HBG are sized to produce 20 SA each per month.

  3. I believe I have read some place in your comments that Airbus shuts down their factories for a month in the summer so the employees can take their vacation all at one time. If that is true, the effective rate of their airplane deliveries would only be 38.1 instead of 42 for 2014. That is, if they actually shut down the factory for a month during the year.

    Gary

  4. As was pointed out to me earlier by Uwe, A delivered 493 320s last year, so they are producing roughly 44-45 a month with the vacation, 41 without vacation. They delivered 108 330s at 9-10 month with vacation, 9 without vacation.

    • FAL lines:
      IMU Toulouse has 2, FXW has 3, Tianjin 1 and Mobile will have another 1.
      Each line seems to have ~8 frames/month capacity
      today: ( 8 + 8 ) + ( 8 + 8 + 8 ) + ( 4 ) = 44 ( 11 month base )
      much later: ( 8 + 8 ) + ( 8 + 8 + 8 ) + ( 8 ) + ( 8 ) = 56 ( 11month base)
      up to another 10% if they reduce the factory sabatical.
      ( on the other hand “Werksferien” are eminently usefull for restructuring and testdriving (new) production processes )

  5. Ît has been touched on but not really directly addressed. How do the suppliers see these rate increases? Are they willing to invest heavily in new tooling (if required) to meet these rates that Boeing and Airbus are requesting? If not, do the big two have other options?

    • Afair remember Airbus noted last year that they intend to reduce single source procurement.

      Boeing announced the intention to squeeze suppliers and going for additional revenue from IP rights ( by way of wetting their beak when suppliers produce for other airframers. IMHO taken from Microsoft drinking from the Android revenue stream.)

  6. What if Airbus keeps selling 1,5 times as much NBs but deliveries stay close..

  7. Pingback: TGIF: Thank-Goodness It’s Flyday Week-End Wrap Up – January 24th Edition » Airchive

  8. The final assembly is the last item of the production chain. However, there are other production steps that might limit the total number of aircraft. Think of the wing production in England or the fuselage segments from France and Germany.

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